CBSN

Auction Vs. Insurance

Republicans emerged from a closed-door session in the Cannon Caucus Room on Friday with a new lead negotiator and an eye on reshaping the economic rescue plan.

GOP leader John A. Boehner, whose members gave him a standing ovation during the session, told the assembled lawmakers that Minority Whip Roy Blunt would be their lead negotiator before fielding concerns about the overarching Treasury plan, according to people in the room.

The most prominent idea floating around is a plan drafted by Virginia Rep. Eric Cantor and Wisconsin Rep. Paul Ryan that would federally insure all mortgage-backed assets at a price and premium established by the government. Cantor and Ryan both received kudos from their colleagues during the meeting.

But it remains to be seen where the caucus stands on this alternative. After the meeting, New Jersey Rep. Scott Garrett, who has offered his own set of alternatives, said, "The mood in the conference is that we should move toward a more fundamental" overhaul of the administration's plan. But Virginia Rep. Tom Davis said his colleagues were "in flux" about what to do, predicting everyone will use their own judgment in voting on the eventual plan.

The question, as negotiations move forward, is whether the insurance idea represents a viable alternative — and one that can be incorporated into the current plan — should Speaker Nancy Pelosi (D-Calif.) and Financial Services Committee Chairman Barney Frank (D-Mass.) be open to allowing the minority party a face-saving measure.

One thing is abundantly clear: Republicans still hate the Housing Trust Fund, a federally funded trust to provide low-income families with affordable homes. Many of the member complaints in the meeting centered on the Democrats' proposal to direct a portion of any profits from the debt-buying program to that trust fund. Republicans view it as a repository for groups like ACORN that don't exactly help the GOP politically.